EPA releases final RFS volumetric requirements
November 23, 2016
The Environmental Protection Agency today released its final Renewable Fuel Standard renewable volume obligations for 2017, winning praise from farm and ethanol groups for increasing the volumes to what they said is the congressionally mandated level, but condemnation from RFS opponents.
The agency finalized a total renewable fuel volume of 19.28 billion gallons, of which 4.28 billion gallons is advanced biofuel and 311 million gallons is cellulosic biofuel, implying that the volume for conventional corn ethanol will be 15 billion gallons.
The 15 billion gallons for corn ethanol is up from the 14.8 billion gallons EPA proposed in May.
"Renewable fuel volumes continue to increase across the board compared to 2016 levels," said Janet McCabe, the agency's acting assistant administrator for the Office of Air and Radiation.
"These final standards will boost production, providing for ambitious yet achievable growth of biofuels in the transportation sector," McCabe said. "By implementing the program enacted by Congress, we are expanding the nation's renewable fuels sector while reducing our reliance on imported oil."
"Today's action shows a clear commitment to achieving the environmental benefits inherent in conventional ethanol and to protecting the future of advanced biofuels in the market," said National Farmers Union President Roger Johnson.
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"We look forward to working with the new administration to continue to support proper implementation of the RFS."
"Today the EPA moved in the right direction by increasing the 2017 ethanol volume to statute. This is critical for farmers facing difficult economic times, as well as for consumers who care about clean air, affordable fuel choices, and lowering our dependence on foreign oil," said Wesley Spurlock, a Texas farmer who is president of the National Corn Growers Association.
"Although we believe the EPA did not have authority to reduce the ethanol numbers in the first place, we are pleased to see the RVO finally back on track," Spurlock added.
"We are pleased that the EPA's rule finally achieves the statutory volume for conventional biofuel as called for by Congress," said Emily Skor, CEO of Growth Energy, an organization that represents ethanol plant builders and operators.
"Today's announcement by the administration validates the critical importance of cleaner burning, less expensive biofuels, like ethanol," she added. "The American ethanol industry is a true success story, and with increased volumes, producers can unleash their full potential to ensure that higher blends, such as E15, are available to consumers and producers can continue to innovate by leveraging 21st century fuels for 21st century cars."
"We look forward to working with EPA, as well as the incoming Trump administration, to ensure the continued successful implementation of the RFS," she said.
"The grain ethanol industry is ready and able to meet its obligation under the Renewable Fuel Standard, and today's rule from the EPA reflects that reality," added Jeff Broin, the CEO of Poet and a founder of Growth Energy.
"I commend the EPA on holding firm to the letter of the law despite enormous pressure from oil interests. These numbers reflect the intent of Congress in making homegrown, renewable biofuels a sizable portion of our transportation fuel supply."
"We can all be thankful EPA has raised the conventional biofuel requirement to the 15 billion gallon level required by the statute," said Bob Dinneen, the president and CEO of the Renewable Fuels Association.
"The move will send a positive signal to investors, rippling throughout our economy and environment," Dinneen said. "By signaling its commitment to a growing biofuels market, the agency will stimulate new interest in cellulosic ethanol and other advanced biofuels, drive investment in infrastructure to accommodate E15 and higher ethanol blends, and make a further dent in reducing greenhouse gas emissions."
"By abandoning its legally flawed reliance on general waiver authority as a basis for departing from statutory biofuels volumes requirements, EPA has sent a strong signal that it will support the biofuels industry and grow advanced and cellulosic biofuel production," said Brent Erickson, executive vice president of the Biotechnology Innovation Organization's Industrial & Environmental Section.
"BIO and its members welcome this change in course by EPA," Ericsson said. "Today's rule adheres to Congress's intent in enacting the RFS statute and ends several years of instability in the RFS program."
National Biodiesel Board CEO Donnell Rehagen also praised the announcement.
"The real winners with this announcement are American consumers who will now have access to even more cleaner burning, advanced biofuel," said Rehagen.
"These benefits extend far beyond the biodiesel industry, supporting high paying jobs and clean air across the nation. Though we are poised to top these numbers this year, growth in advanced biofuels still sends positive signals to the marketplace."
Under the new RFS rule, biomass-based diesel standards would move to 2.1 billion gallons in 2018, up from 2 billion gallons in 2017, NBB noted. The biomass-based diesel category — a diesel subset of advanced biofuel — is made up of biodiesel and renewable diesel, another diesel alternative made from the same feedstocks using a different technology.
Additionally the new RFS rule, would move advanced biofuels to 4.28 billion gallons in 2017, up from 3.61 billion gallons in 2016, NBB said, with biomass-based diesel continuing to fill a large portion of the advanced biofuel program.
The NBB noted that the RFS is a bipartisan policy passed in 2005 and signed into law by President George W. Bush. The law is divided into two broad categories: conventional biofuels, which must reduce greenhouse gas emissions by at least 20 percent, and advanced biofuels, which must have a 50 percent reduction. Biodiesel is the first advanced biofuel to reach commercial-scale production nationwide and has made up the vast majority of advanced biofuel production under the RFS to date, NBB said.
"While NBB applauds the increased volumes, there is room for more aggressive growth," Rehagen said.
"The U.S. biodiesel industry can do more," he said. "The production capacity and feedstock are clearly available as the market is already topping these levels. We will work with the incoming administration to help them understand the benefits provided by our growing domestic biodiesel industry and the potential to support additional jobs and investment in rural economies."
The American Soybean Association was less enthusiastic in its reaction.
ASA "would have liked to see greater support and promotion specifically for domestically produced biodiesel through higher volumes for the biomass-based diesel category," the group said.
"EPA chose to maintain the biomass-based diesel volumes at 2.1 billion gallons for 2018, the same level in the initial proposed rule," the group said. "While it represents a 100 million gallon increase in the RFS biomass-based diesel volumes from 2017, it is roughly the same amount of biomass-based diesel that was utilized in the U.S. in 2015."
"The levels announced today provide opportunities but also do not take full advantage of an opportunity to further promote a viable, domestically produced renewable fuel industry that is U.S. biodiesel," said ASA President Richard Wilkins, a soybean farmer from Greenwood, Del.
"EPA will raise the overall volumes relative to the proposed rule and increase the total advanced biofuels volume requirements for 2017 from 4.0 billion gallons to 4.28, an increase of 19 percent. That's a plus for biodiesel as the primary source of advanced biofuels."
Wilkins noted, however, that EPA chose not to raise the biomass-based diesel volume requirements within that advanced biofuel pool for 2018.
"When EPA issued its proposed rule, ASA clearly stated that the 2.1 billion gallon mark did not adequately capture the capacity of the biodiesel industry," he said. "To see the volume remain at 2.1 billion gallons as they were in the proposed rule is frustrating. We know we can do more."
But the National Council of Chain Restaurants, which has been part of a coalition opposing the RFS, said the announcement showed the final numbers proved that the ethanol mandate is "a total failure."
"It is unconscionable that the EPA would double down on an outdated and broken biofuel law in the waning days of the current administration when nearly everyone except the ethanol makers, who benefit from the law, recognizes that it is a total failure," said Rob Green, NCCR's executive director.
"The EPA should have reduced the ethanol volume this year, but they continue to ignore clear findings from widely available data that shows the ethanol mandate is doing far more harm than good."
"From food retailers and environmental activists to anti-hunger organizations and government-waste watchdog groups, the consensus is clear that the ethanol mandate is broken. Congress created this monster and members of Congress need to listen to their constituents and address this issue once and for all," Green said.
Opponents of the RFS including the oil industry have complained that the ethanol mandate raises costs. Farm and renewable fuels groups have noted, however, that there is a large supply of commodities and that prices are down.
"Ethanol exports add nothing to U.S. energy security and the RFS is not being administered in keeping with congressional intent," said National Chicken Council President Mike Brown.
"The RFS bureaucracy has taken on a life of its own and it is time for Congress to stop this runaway train," Brown said. "American chicken producers are only one drought, flood or freeze away from another crisis. The RFS has cost our industry $59 billion more in feed costs since it was implemented."
Any changes to the RFS would now be up to the Trump administration and Congress. President-elect Donald Trump campaigned in Iowa on his support for the RFS, but he also has supporters and donors who oppose it.
–The Hagstrom Report